Equation 6.1 is the general bond pricing relationship between coupon payment dates. *MV* is the total price including accrued interest; *PMT* is the periodic coupon payment; *FV* is the principal redeemed in *N* periods as of the beginning of the current period, and *t/T* of the period has gone by and 1 – *t/T* remains.

Multiply the numerator and denominator on the right side by (1 + *y*)* ^{t/T}*.

Define the term in brackets to be *PV*, the price of the bond if the yield *y* prevailed at the beginning of the period when there were

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